A prestigious private school with powerful ties to the native Hawaiian community is at the center of a tangled and slowly unfolding controversy.
Since last May, in a series of legal documents and Honolulu Star-Bulletin opinion pieces, the five trustees of the Kamehameha Schools/Bernice Pauahi Bishop Estate have come under attack for allegedly mismanaging money and creating an atmosphere of intimidation at the Kamehameha Schools, Hawaii’s second-largest private school.
The public criticism has prompted an investigation by State Attorney General Margery S. Bronster. The Internal Revenue Service is also auditing the estate.
“The longer this controversy is stretched out, the greater harm comes to the children, the educational institution, and the estate itself,” said Beadie Kanahele Dawson, a former deputy state attorney general who is representing a group of Kamehameha Schools alumni and students called Na Pua a Pauahi, which translates as the Children of Pauahi.
Various groups, including some members of the Kamehameha Schools faculty, have asked the five trustees to step down. But the trustees, who were appointed by the state supreme court and are allowed to serve until they are 70 years old, are hanging on.
“They are litigating over every request the attorney general has made for information,” Kevin Wakayama, a deputy state attorney general, said.
The Bishop Estate has litigated some requests, said Kekoa Paulsen, a spokesman for the estate, because of concerns that the attorney general will release documents that should remain confidential, he said.
Mr. Paulsen said he believes the trustees will regain the public’s trust through expansions it has planned in its educational programs, including growth in the number of children served through pre-school and elementary programs. “The trust and confidence will come back,” he said.
The attorney general’s office plans to ask the state legislature for $600,000 this year to pay for the investigation, according to Mr. Wakayama. He estimated that the probe will not be completed for months.
Estate History
The Bishop Estate was established in the will of Princess Bernice Pauahi Bishop of Hawaii, who died in 1884. Its mission was--and is--to educate native Hawaiians. Toward that end, the estate founded a boys’ school in 1887 and a girls’ school in 1894 for native Hawaiians. The two later were consolidated into one school, located on the Kapalama Heights campus near Honolulu, but officials still refer to the institution as the Kamehameha Schools. (“Financial Realm Makes Private Hawaii School Target of Criticism,” Sept. 29, 1993.)
The school--which serves elementary and secondary students--generally admits the state’s highest-achieving children of native Hawaiian descent. From 1971 through 1996, the estate also ran outreach programs for native Hawaiians throughout the state, particularly in poor communities. Those programs were abruptly ended two years ago, to the dismay of many native Hawaiians.
Today, the estate concentrates most of its resources on the Kapalama Heights school, which has 3,200 K-12 students, who are all of partial or full Hawaiian ancestry and represent 6.8 percent of the state’s 47,000 school-age children of Hawaiian descent. The estate pays the lion’s share of each student’s tuition and offers some students college scholarships.
The school “has always been a beacon for the Hawaiian community,” said Roderic McPhee, who for 26 years was the president of Hawaii’s largest private school--the Punahou School in Honolulu--and recently has advised the Kamehameha Schools faculty. The school provides many native Hawaiians with their best chance of getting into college because it offers a high-quality education and is the only private school that most Hawaiians can afford to attend, he said.
In addition to the Kamehameha Schools, the estate operates two elementary schools serving an additional 200 children and preschool programs serving 940 children. The estate can reach so many children because of its impressive assets. Just how vast those assets are, however, remains a point of contention.
While the estate reports its worth as $2 billion on its 1996 federal tax form, that figure is based on 1965 land values. Long-time estate watcher Desmond Byrne, the chairman of Common Cause of Hawaii, estimates the trust is worth $7 billion, which would make it one of the nation’s wealthiest charities.
Na Pua members marched through downtown Honolulu in May to protest what they felt was poor management by Bishop Estate trustee Lokelani Lindsey. Ms. Lindsey, a former superintendent in the Maui public schools, had been designated by the trustees to oversee school affairs. Na Pua members felt Ms. Lindsey had wrongly stripped school President Michael Chun of his authority, according to Ms. Dawson.
In a scathing report filed with the state probate court and made public in December, a fact finder commissioned by the trustees found much to criticize in the estate’s management.
A Heavy Hand
The fact finder, retired state Circuit Judge Patrick Yim, reported an environment of “control, oppressiveness, favoritism, and arbitrary action” at the school and accused Ms. Lindsey of “management by intimidation.” Ms. Lindsey approved all communication between the school staff and parents, teachers, agencies, governments, and the public, according to Mr. Yim. Her special relationships with certain people created an “environment of favoritism,” he said. Her directives, which she rarely wrote down, were confusing, he charged.
Since the report was made public, Ms. Lindsey has relinquished her role as “lead trustee” for education, but she has continued to fight to hold her trustee position.
In a response to the report that she filed with the probate court, Ms. Lindsey said her actions were justified. She disputed the claims of favoritism and an “oppressive” environment at the school, writing that “this conclusory allegation has no factual basis. Perceptions may be real but not necessarily true.”
In their response, estate officials said the trustees believed President Chun--and not a trustee--should run the Kamehameha Schools. The trustees also pledged to complete a financial and management audit of the educational aspects of the estate’s operations, according to Mr. Paulsen, the estate spokesman.
Mr. Yim’s report convinced trustees Gerard Jervis and Oswald Stender that Ms. Lindsey’s ouster was in the best interest of the estate. They have petitioned the probate court for her removal from her position as trustee. A court date has been set for Feb. 27.
Most observers agree, however, that the estate’s problems cannot be blamed on only one trustee. Five prominent Hawaiians accused the estate of financial mismanagement in an August opinion piece, headlined “Broken Trust,” in the Star-Bulletin.
Then, in November, Colbert M. Matsumoto, who conducted the probate court’s annual audit of the estate, cited examples of what he viewed as questionable financial-management practices by the trustees.
The Bishop Estate disputes some of Mr. Matsumoto’s conclusions, said Mr. Paulsen. A follow-up report is due in June or July.
One of the trustees’ unpopular practices--receiving what some critics say is unusually high compensation for running a charitable trust--has been public knowledge for years. But until May, native Hawaiians defended the estate when criticism arose. The trust’s 1996 federal tax form reports that the trustees received $843,109 each in 1996.
“In some ways we [native Hawaiians] were maybe responsible for the degeneration of matters because we refused to take a look,” Ms. Dawson, the lawyer for the Na Pua group, said.
Teachers were already meeting and discussing the school’s problems before Na Pua’s march, but they have been hesitant to speak publicly because their employee handbook forbids them from doing so.
Union Discussions
“Teachers went silent for a long time and focused on our kids--we put our wings around the children,” said one teacher, who asked that his name not be printed. He is one of four leaders of a faculty group called Na Kumu o Kamehameha, or the Teachers of Kamehameha.
The 200-member Na Kumu faculty group hopes to improve organizational matters at the school. Another faculty group, called the Kamehameha Schools Faculty Association, which shares many members with Na Kumu, wants to form a union.
The Bishop estate contested the teachers’ right to start a union, however, and the National Labor Relations Board is expected to decide soon whether the teachers may vote to do so.
A second teacher, who also did not want her name used, said she felt the probate court’s decision on whether Ms. Lindsey should keep her position “will be a loud message on how much or how little control there should be [by the trustees] in the classroom.”
In his report on the estate’s finances, Mr. Matsumoto expressed disappointment that a greater proportion of the estate’s assets and income is not allocated to education. He found that in 1995 the trust devoted only 37 percent of its spending to the school and 8 percent to financial aid.
Like the CIA?
Mr. Paulsen disputed these figures, saying that 74 percent--or $102 million--of a $138 million budget went to education that year. He said in 1997, the estate spent an estimated $114 million on education, but declined to share the total operating budget for 1997.
Mr. Matsumoto complained in the report that he “could not help but feel as though he was reviewing the CIA’s finances rather than those of a charitable educational organization.” He reported that he was left to “sift through a room full of documents” and was permitted to take only a “minuscule amount” from the room. The trustees insisted on knowing the name of each person he interviewed, he said.
It’s this kind of attitude that “drives serious people crazy,” said Mr. McPhee, the former private school president. He characterized the atmosphere created by the trustees at Kamehameha Schools as that of “a bad spy novel.”
